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|Title:||Does the tenure of private equity investment improve the performance of European firms? |
Baum, Christopher F.
|Issue Date:||2010 |
|Series/Report no.:||Discussion papers // German Institute for Economic Research 990|
|Abstract:||The paper investigates whether the presence and tenure of Private Equity (PE) investment in European companies improves their performance. Previous studies documented the unambiguous merit of a buyout during the 1980s and 1990s for listed firms in the US and UK markets. This study analyzes such influences in both listed and unlisted European firms during 2002-2007. Our analysis suggests that shortterm PE investments have, on average, a detrimental effect on firm performance. The performance of a firm that has PE backing is lower than that of a firm without PE backing in the first year of PE investment. Such an effect disappears if PE investments remain in the firm for an uninterrupted six-year term.|
|Subjects:||Private equity financing|
|Document Type:||Working Paper|
|Appears in Collections:||Publikationen von Forscherinnen und Forschern des DIW|
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